Our
History

The history of LNG Badak
will always become the part of Indonesian LNG industry history.
It began when 2 natural gas reserves in extensive amount were
found in 2 separate areas.

The areas are Arun Gas
Field found by Mobil Oil Indonesia at the end of 1971, located
in North Aceh, and Badak Gas Field, found by Huffco Inc., in
early 1972, located in East Kalimantan. Both companies are
working under production sharing contracts with The State Oil
Company, Pertamina.

The fact that both gas areas are located very far
from potential consumers whom consume
natural gas in large scale. To meet the economic scale
on
project development, at early stage the 3 companies
namely,
Pertamina, Mobil Oil and Huffco agreed to develop LNG
project
which able to export natural gas in large quantity in
liquid form.

This becomes a history
because the 3 companies had not have any previous experience in
LNG and LNG business has never been known. It was only 4 LNG
plants in the world with only 3-4 years of operational
experience, it is understandable why this project was initiated
by an ambitious program with little confidence for potential LNG
consumers.

Despite the above fact,
painstaking months of hard work were conducted by Pertamina and
its both partners whom tried to sell the project to two
potential LNG consumers, potential financiers and also potential
partners all over the world. Finally the effort was fruitful
with an agreement of LNG sales contract on December 5, 1973,
executed by 5 Japan buyers namely: The Chubu Electric Co., The
Kansai Electric Power Co., Kyushu Electric Power Co., Nippon
Steel Corp. and Osaka Gas Co.Ltd.

The contract which then
known as The 1973 Contract was containing the commitments of the
buyers to import LNG from Indonesia for 20 years, to be produced
and supplied by LNG plant which has not yet been fully
established. On the other side, Pertamina agreed to initiate its
LNG supply in mid 1977 from 2 LNG plants to be constructed
within 42 months. It was a challenge. In line with the plan to
establish the LNG plant, it was planned to build tanker for
transportation armada and several recipient terminals, including
the schedule needed to arrange the financial support for these
projects.

Certainly such projects
must involve many companies, banks and financial institutions
and the participation from government institutions from 3
countries namely USA, Japan and Indonesia. Each country has its
own discretion to bring the plant into one objective that is to
ship the Indonesian LNG to Japan. It is clear that the
cooperation among all parties bears an essential meaning in
supporting the project to success.

The History of PT Badak
NGL for more than 30 years has proved that the Indonesian LNG
has its own significance in maintaining a vision namely an
intensive long term cooperation, which always becomes a
fundamental aspect to achieve success.